Analyst casts doubt on reports of next-gen 'low-end' iPhone

Another analyst has countered recent reports that Apple plans to release a cheaper iPhone for the pre-paid mobile market, stating instead that the iPhone 3GS will continue to serve as the company's "low-end" handset.

BMO Capital's Keith Bachman called into question Monday's chatter over a lower-priced next-generation iPhone in a note to investors, Barron's reports. "We believe that the [existing] 3GS will be the low-end iPhone, he wrote.

The analyst also lowered his estimates for Apple's iPhone shipments during the September quarter from 18 million to 17 million, citing a later launch than he previously thought. By comparison, Apple sold 18.65 million iPhones in the March quarter.

Bachman's position takes the opposite side of Deutsche Bank analyst Chris Whitmore. Whitmore sparked speculation of an iPhone priced aggressively for emerging markets early Monday with a much-discussed note predicting Apple will release both an iPhone 4S and a fifth-generation iPhone. He believes such a device could be priced at $349 and be sold contract-free.

Several other analysts have chimed in on the prospect of a more affordable iPhone. Katy Huberty of Morgan Stanley issued a note on Sunday also suggesting that Apple may release new iPhones with "potentially lower price points." She sees the company's next iPhone as going into production in mid to late August ahead of a presumed launch near the end of the September quarter.

Meanwhile, FBR Capital Markets analyst Craig Berger agrees with Bachman that a low-price iPhone is unlikely. The analyst's sources have indicated "no near-term plans for a low-end iPhone for emerging markets, or a new iPhone in a transparent case." He also believes Apple's next handset will be an evolutionary upgrade and will be marketed under the iPhone 4S name.

Media reports have also asserted that Apple is working on a cheaper iPhone. In February, The New York Times said Apple has looked into a cheaper handset. The Wall Street Journal and Bloomberg have also suggested Apple will introduce a cheaper device, though the publications differ on whether it will also be a smaller model.

I just cannot see Apple using the name iPhone 4S regardless of how revolutionary or evolutionary the fifth-generation iPhone is. Whether it's called iPhone 5 or something entirely different is unimportant.

iPhone 4S suggests to million of consumers who are easily convinced by Apple of a new, amazing device, that it's simply another 3GS style upgrade and then that the seventh generation will be merely an evolution to iPhone 6 and so on... It's not a trend they will want to engage in.

No matter how 'different' the next iPhone is, I just cannot see Apple using such a horrid name. And remember, iPhone 3GS was in fact the THIRD GENERATION iPhone so it made sense to keep a 3 in there, but this one will be the undisputed fifth generation to the iPhone line. No need to keep a 4 and especially to make associations with an S.

Oh and then what? We have iPhone 4S as the premium offering, and iPhone 3GS as the 'developing' low-end option? Marketing wise, that's awful!

No kidding. There is never going to be a 'low-end' iPhone. Why water down the device when it is selling so well.

The last gen iPhone becomes the 'low-end' iPhone. Why change?

This has been my thinking all along. But there seems to be a raft of people that believe the "pre-paid market in China" will need a low-end iPhone.

As for emerging markets, there is definitely no need for a low-end iPhone. You just need to supply them with enough product particularly iPhone 5 (iPhone 4S with iOS 5 sounds weird, IMO). These markets where BlackBerry has shown growth also have very low *supply* of iPhone 5. When I say supply I also mean adequate service and support.

I am in an emerging market right now and the useless telco made me wait ONE MONTH for a replacement iPhone 4 due to a flakey Home button. Apple Premium Resellers here were selling iPhone 4 contract-free at full retail price, and with plans, but have more or less stopped since they only get 5 units or so a WEEK at random times.

Now of course the Apple-telco relationships are complex, but my point remains, emerging markets do not need this "low-end" iPhone 5. Just give them the darn iPhones at a reliable, steady rate and ensure the telcos sell and support them sensibly and adequately.

The "pre-paid market in China" is the best rationale for a low-end iPhone but my gut feeling is this is the last thing Apple wants to do while having to create/modify models for China Mobile's proprietary TD-CDMA and TD-LTE nonsense.

I just cannot see Apple using the name iPhone 4S regardless of how revolutionary or evolutionary the fifth-generation iPhone is. Whether it's called iPhone 5 or something entirely different is unimportant.

iPhone 4S suggests to million of consumers who are easily convinced by Apple of a new, amazing device, that it's simply another 3GS style upgrade and then that the seventh generation will be merely an evolution to iPhone 6 and so on... It's not a trend they will want to engage in.

No matter how 'different' the next iPhone is, I just cannot see Apple using such a horrid name. And remember, iPhone 3GS was in fact the THIRD GENERATION iPhone so it made sense to keep a 3 in there, but this one will be the undisputed fifth generation to the iPhone line. No need to keep a 4 and especially to make associations with an S.

Oh and then what? We have iPhone 4S as the premium offering, and iPhone 3GS as the 'developing' low-end option? Marketing wise, that's awful!

By many indications, it might be mostly an upgraded iPhone 4 in the same vein as the 3Gs was an upgraded 3G (largely a much faster CPU and a better cam), so why such a strong objection to a name that would suggest that very thing?

I just cannot see Apple using the name iPhone 4S regardless of how revolutionary or evolutionary the fifth-generation iPhone is. Whether it's called iPhone 5 or something entirely different is unimportant.

iPhone 4S suggests to million of consumers who are easily convinced by Apple of a new, amazing device, that it's simply another 3GS style upgrade and then that the seventh generation will be merely an evolution to iPhone 6 and so on... It's not a trend they will want to engage in.

No matter how 'different' the next iPhone is, I just cannot see Apple using such a horrid name. And remember, iPhone 3GS was in fact the THIRD GENERATION iPhone so it made sense to keep a 3 in there, but this one will be the undisputed fifth generation to the iPhone line. No need to keep a 4 and especially to make associations with an S.

Oh and then what? We have iPhone 4S as the premium offering, and iPhone 3GS as the 'developing' low-end option? Marketing wise, that's awful!

Quote:

Originally Posted by Suddenly Newton

If Apple releases a cheaper device, it'll have less memory, slower CPU, lower quality screen, and an all plastic body. In other words, the iPhone 3GS.

Voices of reason. My take:

iPhone 5 will be iPhone 5. However iPhone 3GS may become iPhone 4S - same form factor, etc. with A4 chip.

By many indications, it might be mostly an upgraded iPhone 4 in the same vein as the 3Gs was an upgraded 3G (largely a much faster CPU and a better cam), so why a long winded objection to a name that would suggest that very thing?

Four words: "Server Grade Hard Drive" and "Final Cut Pro X". Apple can call it the "iPhone 10 X Enterprise-Class Pro" and get away with it.

Four words: "Server Grade Hard Drive" and "Final Cut Pro X". Apple can call it the "iPhone 10 X Enterprise-Class Pro" and get away with it.

That's not what I'm talking about though. I really don't think 4s is such a toxic designation. In fact, I'm more inclined to believe that it's a possibility they'll go with it. When I see an Apple fan get *that* adamant that Apple would not do such a thing, it seems like they often do it. Apple fans thought that they wouldn't make the fat nano because they looked ugly in the spy photos. Some thought the "tall screen" nano wouldn't be done because it's a UI disaster (I understand the argument, but Apple did it anyway). The tiny nano got similar objections, many valid arguments, but Apple did their own thing anyway. Someone claimed the leaked photos of aluminum Apple keyboards was just someone's stupid Photoshop mock-up.

I agree with you on the iPhone 5 being the Premium offering with the features you described but with 1GB of RAM instead of 512MB.

As far as a lower-cost iPhone for the pre-paid market what would be desirable to see is basically the iPod Touch with cellular / 3G chip, 512MB RAM, 3 or 5 megapixel photo camera with 720p video recording, A4 chip running at around 1.2Ghz & with 8GB or 16GB options. I can't see why Apple would have any problem selling this for $299 (8GB) / $399 (16GB) without contract. I would be all over that. For someone that just needs the iPod, texting, voice, app functions this would serve themwell

Yep. 3GS or 90% 3GS with localized modifications for radios. Small spec bump possible but unlikely. Maybe a drop to 4GB in flash memory, but 8 is probably going to be it. It's still a stand up phone. I have one and the 4.

Quote:

Originally Posted by Suddenly Newton

If Apple releases a cheaper device, it'll have less memory, slower CPU, lower quality screen, and an all plastic body. In other words, the iPhone 3GS.

You do realize that Apple is still having trouble meeting demand for iPhone 4's at full unlocked price in China today?

Why would they want to split their resources for a lower margin phone?

That's what I'm saying. I don't think it is a smart nor likely move for Apple to create a specific "low-end" iPhone. A lot of people are saying it... I'd wager an updated iPhone 3GS is this "low-end phone", if it happens.

Wow, we have analysts claiming both that there will be a low-end iPhone and that there won't be a low-end iPhone... Logic dictates that one of them is right. Reality as we know it is about to collapse!

I've accomplished my childhood's dream: My job consists mainly of playing with toys all day long.

Wow, we have analysts claiming both that there will be a low-end iPhone and that there won't be a low-end iPhone... Logic dictates that one of them is right. Reality as we know it is about to collapse!

I remember when there was a lot of clamor over Apple making a mini iPhone to offer a version that's a bit down market. They offered the previous model at a lower cost instead. I think that was a better solution.